Topspin Shows That Premium Offerings Get Sales: People Will Pay For Value Beyond The Music

from the a-reason-to-buy dept

It's really been great over the past year or so to see more and more bands adopting business models that involve tiered "premium" options that add real value for fans -- the key to creating a real reason to buy, as discussed in my MidemNet presentation a couple months ago. We've seen all different variations on the tiered theme from Trent Reznor to Kristin Hersh to Jill Sobule to John Wesley Harding and many others. Personally, I still think that the most creative of the bunch is Josh Freese's tiers that go from just fun to ridiculous (one option lets you keep his car -- after you drop him off at home).

One of the companies that's doing a good job helping some musicians make this model work is TopSpin, who we've discussed before. In fact, TopSpin has helped Reznor and Freese with their offerings (as well as the Beastie Boys, who recently launched something similar, as well). With TopSpin's platform coming out of beta this week, the company has released some data on its success so far, and it's impressive -- especially for those of you who keep insisting that fans these days just want music for free and are unwilling to pay for anything.

Its campaigns have certainly helped bands grow their audience and improved ways to connect with fans. One of its first major projects was the release of David Byrne's latest album, and it increased his email list by 3000%. (Update: Originally we said 37%, but that was wrong. It's actually 30x, or 3000% as per Topspin).

The various projects have shown that people are quite willing to pay if they're provided with real value and given a real (rather than artificial) reason to buy. The average transaction price is $22 -- significantly more than what people are paying for "just the music" and even more than what an average CD costs.

Perhaps the most appealing stat: on a recent project 84% of the orders were premium offers above the lowest tier. People will pay more for being given real value, rather than just being forced to pay for the music.

This is great news. Unfortunately, TopSpin is still rather limited right now to bigger name artists (they pick and choose who they work with). I think the world is open for another player to come in and disrupt the market by making such systems available for anyone. Also, in the various projects that TopSpin has run so far, I still think the pricing is a little off (Reznor's was the exception, and he only used TopSpin's backend, rather than its whole program). Also, it seems pretty rare for artists using TopSpin to offer a free option, which limits opportunity greatly (and drives folks to file sharing, rather than opening up a better relationship with those fans, and maybe gaining an email contact and the ability to create sales later). This is (I hope?) an issue from the musicians' side, rather than TopSpin's.

It's also worth noting that the company has also announced a program with Berklee College of Music to teach courses to musicians in how to leverage TopSpin for better business models. Hopefully at least some of that class will include an explanation of how using free as a part of your business model can extend it even further.

Re: Thieves

screw you and the horse you rode in on.

Theft ain't the issue here.

The issue is simpler: How would this work for an unknown artist? Remove Trent and Freese and replace them with "bob from the bar at the corner" and "my daughter helen that wants to start a band". Then explain how it works for them.

It's easy as heck to take well known names (built up and paid for by the existing label / radio scheme of things) nad have their fans follow them from A to B to C. Plenty of NIN fans would bleed gold to get something from the band. You don't even need a grand and complicated scheme to get their money. That isn't the hard part.

How does the model work from garage band to international stardom? How does this help anyone except the existing established acts?

Re: Re: Thieves

Re: Re: Thieves

You keep putting these examples, and these questions, out Harold, so how about you answer one? Explain how your model, the current model, does ANYTHING at all to help 99.999% of the bands and musicians out there?

Clue: It doesn't. Doing it your way, the established way, only the tiniest select few get any backing and any chance at stardom. Worse, it has less to do with talent than perceived marketability, and the once judging that are the ones that prove time and again that they are fallible.

This way, the new way, the way that will come despite your bias and ignorance, everyone with talent will get a chance to increase their exposure, to increase their audience, to increase their fan base. Instead of being almost nothing or being a superstar, broke or rich, there will be myriad levels of success in between. Instead of fans and musicians being forced into a predefined niche everyone will have endless options. The pocketbooks of all those who don't like mainstream, billboard chart, artists will open up for the new ones - vastly increasing the amount of money spent on music.

Take off the blinders Harold. There's not a fixed X dollars available to musicians, more musicians won't hurt existing ones. More choices won't hurt consumers or the industry. New business models won't hurt business but grow it.

Breaking new bands

Count me in as another who is interested in ways to help unknown bands survive. My music biz experience has been at the grassroots level, and I know how that process works. It's gotten more complicated now that people are buying fewer CDs, because that used to be a reliable income stream from fans to bands. Trying to make up the difference by playing more shows, charging higher ticket prices, and/or selling more t-shirts doesn't always work.

I'm not complaining. I'm just pointing out that while it is now easier for unsigned bands to reach out directly to fans, actually earning money from the process remains a challenge. There are more bands giving away more music.

Re: Re: Thieves

Hey dumbass, if you and your idiot industry friends don't drive yourselves out of business what's to stop you from using this to you advantage? You can watch for the bands that are building a following on their own then swoop in, sign them, and save yourselves the costs of searching and grooming those that have so much talent that they can rise on their own.

yeah, you already know that, but it scares you because you also know that once bands start rising on their own, making their own money, building their own labels, it's too easy for them to see you as the manipulative greedy leeches you are.

Not all big name acts

While the attention has definitely gone to the big ticket releases like Byrne/Eno and the Beastie Boys, Topspin isn't used exclusively by big names -- just to pick a couple of my favorites, the Texas band White Denim and LA singer/songwriter Imaad Wasif are using their tools.

It's fair to ask whether the return for lower-profile performers is similar to what the well established people see (and I don't know the answer to that question), but the Topspin platform itself isn't entirely big names, and I expect that Topspin is thinking as much or more about developing artists -- the Berklee connection certainly points in that direction.

Re: Re: Re: Thieves

Take off the blinders Harold. There's not a fixed X dollars available to musicians, more musicians won't hurt existing ones. More choices won't hurt consumers or the industry. New business models won't hurt business but grow it.

Here's where I have a problem with this: On one hand, we are told (by the great gurus) that music sales are down not because of P2P and tubes but because there are so many other entertainment choices out there, so people are just choosing not to buy music.

This while the amount of music in the average individual's possession continues to rise.

Then on the other side, the same great gurus say "embrace the new business models and you will all get rich". Yet nobody is explaining how suddenly the total number of entertainment dollars will shift back to music.

At this point, there is only so much water (money) in the music swimming pool. In order for it to be deep enough for people to swim, the size of the pool is smaller, and the record labels and other mechanisms have positioned themselves to control who is in the pool and who isn't. That part sucks, I agree, but what's the alternative?

Well, you can make the pool bigger. So let's make the pool 10 times bigger so there 10 times the space to swim in. Wait, now instead of a pool that has water 5 feet deep that people can swim in, we now have a wading pool that is 6 inches deep. Now nobody is swimming. Expand it 10 times bigger than that, and now everyone barely has enough water to cover their little toe. So much for swimming.

Now, that example only covers a 100 times increase in the size of the commercial record selling acts. Put in money terms, if each signed act is generating $100,000 of income today, the "new business model 100 times bigger" would see that number drop to about $1000 average. 4 guys in the band, they each get $250 a year, or about 70 cents a day (enough to save a starving child in Africa, I am told).

Instead of fans and musicians being forced into a predefined niche everyone will have endless options. The pocketbooks of all those who don't like mainstream, billboard chart, artists will open up for the new ones - vastly increasing the amount of money spent on music.

That isn't anywhere near proven at this point. Again, there is nothing out there that says the pool of entertainment dollars will get any deeper, and nothing out there that suggests that music would suddenly gain money back from other entertainment choices.

Just as importantly, you lose the star power of the situation. If U2 was just an irish pub band, or Trent Reznor was still washing dishes for a living and playing with his one syth back in his one room apartment, would they be selling or giving away that much music? There is little done in all these new business models to discuss the loss of the star system. I can remember seeing numbers where the top 10% of all signed artists account for more than 50% of the sales. Remove that process and replace them with tens of thousands of little regional bands and artists selling 5,000 itunes downloads a year, and that is what is left.

So we can't have it both ways - either there is a limited number of entertainment dollars and music isn't getting as many as before, or there is an infinite number of dollars provided we have a nice shiny new model of business that in the end will just create DIFFERENT middle men. I am guessing TopSpin isn't free, right? ;)

Re: Re: Re: Re: Thieves

That isn't anywhere near proven at this point. Again, there is nothing out there that says the pool of entertainment dollars will get any deeper, and nothing out there that suggests that music would suddenly gain money back from other entertainment choices.
For proof I would suggest that you look into ANY aspect of your life and the lives of those around you. Movies? When you tired of the same ole' same ole' do you keep going or do you find new activities? Dining? When you're sick of the same old restaurants and there are no other choices do you keep going or do start to eat at home more?
That's what happens with music too. We're human, we stagnate, we seek change and growth. It's nature to like variation and choices, to want to experience and enjoy new things. No matter how much we enjoy something to begin with we tire of it and we don't keep spending on it, we slow spending or, worse for the companies, we quit and we move on to new forms of entertainment.
In the past the record industry has thrived by gaining new generations of fans not by keeping the old ones from moving on. Now it's failing because it's ignoring the new generations, their needs, and their ways. Also, its ill considered attempts to protect its profits or focus entirely on youth are driving the older fans away quicker than they'd leave before.
Sure, there are a limited number of entertainment dollars, but the point is that it's far, far, above current figures. The current way of doing business is forcing that number to dwindle. A change of business plan could force that number to grow.
To your last point, there may be middle men in the new wave, but they aren't as mandatory. If TopSpin is hugely successful it'll become a popular middle man - but only because it offers a distinct advantage over doing it yourself. The way things were, the middle men were required to succeed, the record companies were the mafioso coming around to collect their protection money. That's what scares them, they see the won't be mandatory, that their collection monies won't be guaranteed, and they're too stupid to make the changes that would use their resources and their connections to make them the middle men of choice of future artists.

Re: Re: Re: Re: Thieves

"embrace the new business models and you will all get rich"

Please cite where this is stated. I think you'll find that most people are interested in musicians making a living from their music, not getting rich. The days of talentless karaoke singers showing us around their million dollar mansions (paid for by advances they dhaven't realised they need to sell 30 #1 albums to pay back) on TV are soon to be over.

By the way, have you ever actually tried reading past posts on this site before you tried poking your empty head in here? You'll see the term "Masnick's law" mentioned a few times to refer to idiots like yourself. If a model is mentioned that helps an unknown artist, someone comes in and says "well, that won't work for a 'name' artist". If a similar model is mentioned as working for a big name, someone comes in and says "well that won't help the little guy". As ably demonstrated by yourself, if you're committed to opposing every new innovation in the music industry, you contradict yourself rather quickly.

These models work for unknown artists, and work well. They just don't become multi-millionaire household names because of it. Frankly, actual musicians don't care about that so much and are happy to make a comfortable living from their art. Unless you think that "big sales" = quality, in which case you are deluded.

"I can remember seeing numbers where the top 10% of all signed artists account for more than 50% of the sales."

That's actually what's WRONG with the current system, and has nothing to do with the new models being suggested. The new models are part of an attempt to fix the music industry, and one major part of that has to be a move away from depending on a few "blockbuster" releases at the expense of anything new and interesting.

Bandbox

With regard to this comment:
"Unfortunately, TopSpin is still rather limited right now to bigger name artists (they pick and choose who they work with). I think the world is open for another player to come in and disrupt the market by making such systems available for anyone."
...I think Bandbox (.com) has something on TopSpin. They get what we artists want/need. The platform is free to the artist (imortant for starving artists, and ease of adoption), and 100% back (as a starting point), with inexpensive tiered features such as fan data, physical fulfillment, etc. I've really been happy with them - great guys out of Nashville, who are musicians themselves.

They really don't have any clue, do they?

Harold,

Perhaps if the music 'industry' wasn't trying to destroy itself by alienating and suing their customers, people 'might' be willing to spend a little more on music. However, as long as there are idiots like you defending this outdated business model as 'the only one that works FOR US', then don't be surprised when you don't have any customers.

Can you think of any other industry where the customers are expected to give 80% of their money to a money grubbing middleman rather than to the 'starving artist'? And if you can, is it still a sustainable business model today?

You complain about the 'smaller pool' that Music industry has today, but the industry has no one but themselves to blame. Perhaps if the RIAA hadn't been standing on the lifeguard chair pissing in the pool and on all their customers, there might actually be a few people willing to stay and play in their pool. As for me, NOT ONE CENT (I haven't purchased 'industry' music in over 10 years).

Entertainment dollars

I'm one of those who don't think there will be more disposable income available for music. At best, you'll just shuffle the amount from one entertainment offering to another. At worst, the amount available for entertainment will decrease as the economy takes its toll.

It's that second scenario that I see happening. Most people I know are cutting back on something. And the national/international figures show real contractions in spending.

So I don't see more money being available to support more musicians.

However, music will always been made and listened to, and it can be done on the cheap. You can listen to, play, and record music for next to nothing these days. So I have been telling people to expect that the money for music will be gone. Will you keep doing it if that is the case? The musicians who love it will. They may need to have day jobs to pay the bills, but music will survive. It may be free in every aspect, but it will survive as long as people can sing in their showers and with their friends.

Wowee...

Some of you folks get awfully worked up about this stuff, on both sides of the issue. I'm glad to embrace the free infinite good model, but let's just allow the Harolds of the world some time to mourn their loss. Like it or no, the paradigm has changed and big music isn't going to get the genie all the way back in the bottle, so instead of complaining about how it used to be so much better and persecuting those who take advantage of the wonders of technology, just suck it up and deal. You won't get the good ole days back, end of story.

Oh, and as a final thought, I'd like to take a page from Harold and his crew: "You kids get off my lawn!!!!!"

Re: Entertainment dollars

I agree to an extent, but the major shift is that more of the money will be going to the artists instead of the labels. The industry may see fewer mega-millionaires, but a far greater number of artists who don't need a day job anymore. The net result is more talent, more quality music, and many more loyal fans that are very supportive of the artists' work.

Re: Re: Entertainment dollars

What is really funny in all of this is that people forget that today's middlemen will be replaced with tomorrow's middle men. The biggest fallacy is that artists will somehow have the time to do all this PR work, maintaining websites, touring, selling merch, and all those other things to make living. They won't. The merch will outsource to a t-shirt company that will pay them net about $2 a shirt. They will hire webcompanies to run their websites, pr flacks to write the content, managers to arrange interviews, handlers to package the music, and so on. In the end, the collection middlemen some refer to as the "greedy pigs" will be replaced by another group of greedy pigs, just wearing hoodies and jeans instead of suits.

The industry may see fewer mega-millionaires, but a far greater number of artists who don't need a day job anymore.

The scale suggested on this site and others is that thousands of artists will suddenly hit the market. So take a few mega millionaires and divide that cash up between thousands, and they all have beer money (quick, what's 10 million divided by 1000? 10k, or less than the poverty line). At 10k, they will need a day job just to eat more than past every day.

The promised land looks better in the brochures than it will in reality.

Re: Re: Re: Thieves

1) I ain't in the music business, so it isn't my business going down.

2) They ain't my idiot friends any more than they are your idiot friends

3) removing all that supports and builds artists at this point and replacing it with a DIY universe is going to be fun - or actually funny. Where there suddenly isn't any new acts out there to sell out arena shows, everyone will remember why a star making system actually works.

4) The only manipulation is those who would make you think that you have the right to everything that isn't nailed down for free.

Re: Wowee...

I'm not mourning, it isn't my business and it's no loss to me directly. But I can see where this is going, and in the end, we are all poorer because the quality of the material we will see on TV and listen to on our direct digital listening systems will be lower as result of a lack of investment in the product.

There is no chance we are going back to the way things were, but that isn't for any other reason that that the current P2P universe has removed all of the value from music. Even stopped today, it will literally take a generation to make people believe that music isn't free.

The milk is spilled and spoiling on the floor, and nothing anyone can make "FREE!!" will make that lost value come back.

Re: Re: Re: Re: Thieves

I think we should spend some time focusing on Musicians "getting rich". I always marveled at the arrogance of this country's *entertainment* industry where they felt entitled to living a life of luxury for playing games/music/pretend. I don't do what I do in the hopes that I'll become filthy rich-- I do it because I find it interesting. The business models often discussed here will make it viable for talented musicians to be able to live a comfortable life doing what they love to do, but will undoubtedly end the era of royaty-like superstars. If sanity ever rears its ugly head in copyright policies, this will even mean that musicians will have to wallow in the dirt like the rest of us and actually have to work their whole lives to eat, instead of making one hit and milking it for decades after they are dead-- but I digress.

I think that making it viable for more musicians to make a decent living from making music at the expense of making it less likely to be in the market for gold-plated shark tanks a good move, and my only regret is that we can't bring the same sanity to the movie business.

Just my two cents. (which won't ever go to the major labels until they clean up their act.)

Smaller artists on Top Spin

Hello,

Nice article except that I think that possibly you may not know that Top Spin DOES work with smaller artists. Not just Byrne or Beasties.

Have you ever heard of Joe Purdy? HELL NO you haven't or you would know he used Top Spin to launch his 10th album this week. Ok and I manage him so this is also a shamess plug as well but the point is that we've been working within Top Spins philosophy for a few years now. Selling direct to fans without a label. His catalog has sold over 800,000 tracks on Itunes in the US alone.

When I heard about Top Spin I went over to the office and they showed me what they had built and I crapped my pants. The platform is everything I was doing but on steroids. It's true that they aren't picking up every single artist under the sun out there. That's for companies who build ugly widgets. They are picking up artists who have a growing base or artists who can expand their already successful base. I think that will set them apart from companies that pop up every 3 months with a Ralph Kramden idea to save the music business.

Joe Purdy's new album sold about 500 downloads in the first 24 hours via Top Spin. I was able to release it 2 hours after Joe finished his cover art and approved the mastered audio. His fans knew that from the email that we sent to them and they felt special! They knew that they had it immediately and felt empowered. AWESOME! Word of mouth, instant back end info on who is buying and where, direct email thank you to the fan, viral player that spreads our store across the web, super distribution, more fans, I love it!!!

Re: Re: Re: Entertainment dollars

Be that as it may, at least tomorrows middlemen will know they are middlemen. As it stands now, the recording industry seems to have forgotten that without musicians they are nothing, and they've managed to blind many musicians to the fact that without fans, they too, are nothing.

I dare say the t-shirt guy will know the needs the musicians more than they need him, and tying the musicians more closely to their fans would remind them of who needs whom more. ;)

Re: Re: Re: Re: Entertainment dollars

You've got that upside down. Without rich celebrities, who will the people turn to to tell them how to dress, what to buy and what to think? No, it's the people who need the artists, and not the other way around.

Not only are you trying to kill the economy with your "free" rhetoric, but you're on your way to killing our culture!

Re: Re: Re: Re: Thieves

With your Pool analogy, if there isn't someone managing the pool and who gets in and out, then competition will determine it. Those who get a larger share will be those who have talent and can take advantage of that talent. Those who don't have what it takes to get a big enough share simply won't but that is competition at work. Sure there probably isn't enough for every single person who wants to be musicians to make a living, but those with talent and good business models will thrive, rather than those chosen by a gatekeeper.

Labels vs. DIY

I've felt that most bands/artists are better off on their own. The String Cheese model, where you have your on PR firm, travel agency, merch company, booking agency, management agency, has made sense to me.

But one thing that gets tossed around that doesn't make sense is this:

People are saying that bands will make more money on their own than through a label. That was probably true a few years ago when all the CD sales money went into the band's pocket.

But now bands are giving away their CDs for free. So what difference does it make if they get no money from the label or get no money giving away their CDs? Either way, there is no money from CDs.

If you are making your money from shows and merch and you haven't signed a 360 deal, then aren't you better off with that major label promotional budget working for you?

Of course, what I don't like about label deals is that they control how often you can put out recorded music. I think bands should put putting out material all the time (like the Beatles), so in that regard I think a label deal is limiting.

I Agree

Re: Re: Re: Entertainment dollars

The biggest fallacy is that artists will somehow have the time to do all this PR work, maintaining websites, touring, selling merch, and all those other things to make living. They won't.This is the most intelligent post I've ever seen you add, WH!

And you know what? Fuck 'em.

Every day, millions get up to go to work. They offer their skills when they do. They get paid to do so. Sit back and not do anything but reap the rewards off their labor? Fired.

How long does it take for an artist to do the actual work? Are you trying to tell us, once completed, they have no time to promote themselves?

Sounds to me they're hoping a publisher, record label, or television station will pick them up.

Damn, must be many out there who starved to death relying on this model when they could have easily distributed themselves on the internet, with no middle man, and coming up with ways to make money themselves.

Your example of touring simply relates the missing equation you often forget: People go to concerts because they've already been promoted.

I can't believe you can't see this relationship on your own. But it doesn't surprise me.

I think I'm going to cry over this part of your reply. Too bad the rest was crap.

Re: Bandbox

hmmm. if they're giving their service away for free, guess they won't be around long... Zach - you really sound like a shill for bandbox with that key messaging marketing speak. you don't work for bandbox, do you?

Article correction

Hey Mike,
Great coverage. A couple of things...

* 'slight' inaccuracy: "One of its first major projects was the release of David Byrne's latest album, and it increased his email list by 37%".
***** the real figure here is "increased his email list by 30x, not 37%...i.e., 3000%".

* Also, you mention a few examples that have gotten a fair bit of publicity, but there are 10x more pet projects for the little guys that Topspin staffers are running on their nights and weekends to show the new bands how to apply the same fundamentals - turn each fan touchpoint into a relationship and treat it like gold by giving those fans quality content early and often, and also not letting your drummer blast the email list after a night of PBR specials and turtle racing at Brennans.

I wish I could post a few excerpts from the internal threads amongst the Topspinners that reveal the passion we've all got for finding truthful answers to the questions raised (about helping the little guys) in the comments on this thread. Suffice it to say we're not resting until we've translated the Byrne/Eno/Beasties experience into something that works for talented upstarts in a self-service mode.

There may even be a certain head-shaving deal that's been made within our ranks. Picture Ian, Bob, and I with shiny domes a-blazin.

800,000 is small

The point that Top Spin is missing is that artists like Joe Purdy selling nearly a million individual tracks can not be the little guy. There are millions of bands that will never make more than 10,000 sales, but may have 1,000 true fans.

Everyone Else

Boys and girls....it is very encouraging that the dialogue has, and will continue, to exist so that people, like yourselves, can share their own unique point of views on any number of subjects concerning the "next best version" of just about anything available/possible under the sun. That said, and this is just my point of view, regardless of the "tools" offered/available, how one uses them in terms of skill set and level of dedication to task will ultimately determine the relative "success" of their actions. They call this HARD/SMART WORK, ATTENTION TO DETAIL and the RELENTLESS PURSUIT OF HAPPINESS. "Models"....get it straight...there where, there are and there will always be any number of opportunities to try something new on a daily basis. Try this one out for size...get up off your duff and get to work....be smart about it...try something/anything...if it works..do more of it...if it doesn't, find the value in the action and then try something else....just keep trying...be open to suggestion from those who know and love you...just keep at it...if you believe in what you're doing...the word will spread until you find other like minded humans who share your vision/point of view...if that works...do more of it....REPEAT WHEN NECESSARY/POSSIBLE....as always...best of luck to those who sleep...Mitchell Fox